How can we outsource our IT?

We are a 400-strong nationwide courier company with a turnover of £75m. I am considering streamlining our IT department and outsourcing the job to an Applications Service Provider (ASP) in order to save money and concentrate on our core business. The main areas that need looking at are the remote hosting of our network and handing over security, backup and maintenance. We have done some preliminary research and it looks like a big jump, so we would appreciate any guidance you can give us about choosing an ASP, the costs involved, managing the relationship and what to look out for in any contract.

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Updated: Oct 3, 2013 Published: Aug 28, 2007

A. Simon Edwards of Microsoft Business Solutions writes:

IT systems must be a pivotal part of your company’s ongoing development if you are to maintain a competitive edge. So it’s essential that you are very careful with your choice of supplier. Finding a company that doesn’t just maintain your IT systems, but develops them in line with your growth strategy, is absolutely vital. When you are searching for an outsourcing partner, look for one who, as well as having the operational skills, also has the insight and desire to work with you and help grow your business.

The best advice is to not get bogged down in detailed and extensive contract definitions and the small print. After all, if your relationship ever reverts to using contractual terms to settle disputes then it has already failed.

Clearly you need to check their credentials, such as existing customers, certified staff, processes and equipment, first, but don’t be swayed by claims of their being the biggest, securest and so on. You need to find the ASP that’s best for you.

This approach mitigates the major risks of outsourcing that are often centred on mismatched expectations of what the outsourcer will actually do as part of the service. If in doubt ask, but never assume. Any reputable IT supplier will be happy to detail what the service includes.

Ensure that, whatever path you take, you maintain an insight into how IT supports and drives your business. If your company doesn’t have skills in-house, then that should be a key part of what you look for in an outsourcer.